Apple says its iPhone 4 profit margin is not as big as some published reports claim. (Source: Apple)

Apple revealed in its conference call that its $1B USD N.C. data center will be online by the year's end, but, secretive as ever, it would not discuss what it was for. (Source: 9to5mac.com)

Company opts not to talk about Facetime interoperability, data center in conference call

For
Apple there's the good, the bad, and the ugly right now. The
good is that the company just posted another
quarter of impressive sales and earnings. The bad is
that it's finding itself increasingly the target
of antitrust attention in the U.S. and abroad thanks to its
growing size. And the ugly is certainly the reaction of
customers to Apple's announcement that it would not
be offering a recall or direct engineering fix to the
iPhone's antenna
woes (Apple's preferred solution is to hand out free cases
that limit the issue).

Amid that backdrop Apple chief
executive officer Steven P. Jobs, chief financial officer Peter
Oppenheimer, and chief operations officer Tim Cook took part in
a quarterly
conference call that was equally interesting for what was
left unsaid as what was said.

The first jewel from the press
conference was an attack by Oppenheimer on iSuppli's estimates of the
iPhone's cost. According to iSuppli, the recently released
fourth generation iPhone costs
$187.51 in parts (and with contract reportedly brings Apple around
$600 per phone sold). And iSuppli also has estimated that the
$499 Wi-Fi iPad costs a mere $260 to make.

If accurate, even
given the cost of labor and engineering, those numbers would indicate
a massive profit margin. While not officially calling out
iSuppli by name, Oppenheimer suggest that the published estimates may
be suspect. He stated in the call, "I'm suggesting you
don't put a lot of credence in these third party reports."

Actually
this may be more than just Apple trying to disguise its profit
margins -- there may be a legitimate question of the iSuppli
estimates' validity. According
toTechcrunch,
"iSuppli is well-known for low-balling these numbers in an
effort to convince manufacturers to contact them in order to connect
with their preferred suppliers, so grains of salt must be
taken."

Also interesting in the conference call was
Apple's refusal to talk about its upcoming $1B
USD North Carolina data center that will be completed by the
end of the year. The 500,000 foot structure is five times
larger than the company's current data center in Newark, California.
While Apple refused to discuss how it would be put to use it is
widely expected that Apple may use it to launch a streaming music
subscription service.

If Apple launches a service it will
likely come bundled with a DRM scheme different than that backed by
its competitors. Sony, Samsung, Nokia, Adobe, Cisco, HP,
Toshiba, Microsoft and Intel are all backing a new cloud DRM scheme
called UltraViolet -- which Apple wants no part of and will likely
try to lock out of its devices.

Of the data center's
completion Oppenheimer would only cryptically state: "And then
we plan to use it."

Also interesting was that Apple
failed to discuss Facetime interoperability. Currently only
available for video chats between iPhone 4s, Steve Jobs has said a
spec would be published allowing calls to other devices. He has
not made it clear whether this might include competitors' phones like
the Sprint HTC EVO 4G powered by Android. Video chats with
webcam-equipped Windows notebooks could also be possible. Cook
deflected this question, though, stating, "Punting that one for
another day."

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"This is about the Internet. Everything on the Internet is encrypted. This is not a BlackBerry-only issue. If they can't deal with the Internet, they should shut it off." -- RIM co-CEO Michael Lazaridis